– Annuity purchase agreements fully fund largest U.S. pension plan, eliminate associated liabilities, including nearly $166 million unfunded obligation
– Investment-grade insurers to administer plan and pay future benefits
– Transaction enhances Dana’s credit profile and further improves balance sheet
MAUMEE, Ohio, June 24, 2019 /PRNewswire/ — Dana Incorporated (DAN) today announced that the company has transferred all liabilities associated with the Dana Retirement Plan, its largest tax-qualified U.S. defined benefit plan, by purchasing group annuity contracts for all remaining plan participants.
Dana Incorporated logo. (PRNewsFoto/Dana Incorporated)More
The company contributed approximately $62 million of additional cash to the plan to facilitate the transfer.
The pension liabilities were transferred to two highly rated, investment-grade insurance companies selected by an independent fiduciary. The selected companies will pay and administer future benefit payments to plan participants. The combination of the annuity purchase and a lump-sum offer in May 2019 removes nearly $940 million of pension obligations, of which approximately $166 million was previously unfunded, from the company’s balance sheet.
“Dana is committed to fulfilling its pension obligations,” said Jonathan Collins, executive vice president and chief financial officer. “These agreements allow us to fully fund the plan, which will now be paid and administered by secure and reputable insurance companies and backed by the state guaranty association in the state where participants live. For plan participants, nothing really changes except the company that administers and provides the benefit. The actual benefit does not change.”
About Dana IncorporatedDana is a world leader in providing power-conveyance and energy-management solutions for vehicles and machinery. The company’s portfolio improves the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment. From axles, driveshafts, and transmissions to electrodynamic, thermal, sealing, and digital solutions, the company enables the propulsion of conventional, hybrid, and electric-powered vehicles by supplying nearly every vehicle and engine manufacturer in the world.
Founded in 1904, Dana employs more than 36,000 people who are committed to delivering long-term value to customers. Based in Maumee, Ohio, USA, and with locations in 33 countries across six continents, the company reported sales of $8.1 billion in 2018. Having established a dynamic, high-performance culture, the company has been recognized globally as a top employer, with significant honors in Asia, India, Italy, Mexico, and the United States. Learn more at dana.com.
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